The Budget may have doubled down on cyber security and subsidised the digital transformation and training of small businesses, but optimism about its tech commitments has been tempered by concerns about vague timelines and missed opportunities.
Industry figures were generally supportive of the 2022-23 Budget commitments to digital skills capabilities, particularly the Small Business Technology Investment Boost – which will provide a 120 per cent tax deduction for up to $100,000 worth of expenditure and depreciating assets that “support digital uptake” – including payment devices, cybersecurity systems, and subscriptions to cloud services.
A companion Small Business Skills and Training Boost will provide similar benefits for companies undertaking external training, whether delivered in person or online.
Beyond its tax incentives, however, the Budget was relatively light on detail around startups beyond a $56.2m commitment to support women entrepreneurship and help women transition into tech sector jobs.
Despite the Budget funding commitments, industry figures were quick to point out that those investments in training won’t pay dividends for years down the track – leaving a yawning skills gap that, Metigy CTO and co-founder Johnson Lin said, will haunt an Australian startup sector that is kicking goals but needs certainty around skills and backing.
“We knew this talent crisis was coming [and] our industry has predicted it over and over again,” Lin explained. “But thanks to sub-par government investment in engineering skills, our industry has now tipped over into a productivity crisis.”
“The government must start to take its role in supporting the tech and startup ecosystem more seriously,” he continued, noting that Australian tech businesses “created 66,000 jobs during the pandemic and that startups secured more funding in 2021 than in every previous year combined.”
“We’re no longer the underdogs,” he said, “but we, as startup founders, need to have the confidence that the support for a growing workforce will come, in the same way that investors are putting their confidence in us.”
Can’t buy me cyber... or can it?
The government’s commitment to cyber security offensive and defensive capabilities – which will see $10b invested over the next decade to bolster the Australian Signals Directorate (ASD)’s cyber security capabilities under a program called REDSPICE – was well received despite a backloaded funding schedule, not the least for its commitment to add 1,900 skilled cybersecurity staff.
The investment “could not come at a better time,” said Dale Heath, engineering manager at Rubrik ANZ, who noted that Australia needed to step up in a climate where Russia’s invasion of Ukraine had exacerbated the “alarming rise in cyberattacks targeting organisations of every stripe [and] geopolitical conflicts spilling into cyber space.... reinforcing our cyber resiliency is a national priority.”
Yet in a market where companies are already struggling to find qualified cyber security staff, PwC partner for cyber security and digital trust Pip Wyrdeman warned that throwing money at the cyber skills gap is far from a panacea.
Although the government’s commitment to cyber security funding is “very positive [and] can only be good for all of us at the family, business and government levels,” she said, warning that “finding or training another 1,900 cyber skilled personnel won’t be easy and it’s not just as simple as throwing money at the problem.”
“We know the size of the problem is much bigger than 1,900,” she added, noting AustCyber estimates that Australia will need 17,000 new cyber security workers by 2026. “There’s much to do,” she said, “so there’s some details we need to see.”
As challenging as finding the numbers is the timeframes around skills development, others pointed out, warning that the budget’s short-term focus fell short of the long-term goals that are needed to build a self-sustaining digital capability.
“It's encouraging to see the government injecting funds to support small businesses adopting cyber security technologies,” said Raymond Maisano, ANZ head with Cloudflare. “However, the Federal Budget has missed out on addressing the growing and critical shortage of cyber security talent in Australia.
“Investments into STEM education, particularly for women, are of great assistance, but provide little to no short or mid-term impact,” he said. “It would be great to see the government create support for internship programs to develop the essential, real-world experience cyber security workers need to succeed in the industry.”
The government’s focus on trade apprenticeships reflected a positive step towards skills development, Cyara CEO Alok Kulkarni said, but would do nothing for a tech and innovation industry that has been “paralysed by the lack of talent during the pandemic as international borders shut and Australian companies survived on only a small pool of local talent.”
“More needs to be done to develop a STEM workforce,” he said, “from students in high school right through to the tertiary level.”
The government’s focus on cyber security was important, Kulkarni added, while pointing out that “there are many Australian technology companies outside the cyber security space that also require much needed investment, such as software developers and engineers. Local innovation and talent needs to find its way to the heart of future budgets, so we can focus on becoming a nation of creators, rather than adopters.”